As the National League for Democracy (NLD) nears the two-month mark of its administration, it is still very early days to be judging Myanmar’s first democratically-elected government in half a century. Nevertheless, with the country now well beyond the euphoria of the post-election period and the transition of power that took place on 1 April, some pointers to prospects over the rest of this year are already emerging.
Notwithstanding ongoing military clashes in the north of the country and tensions between the new government and the armed forces, we are confident in Myanmar’s basic political and economic stability in the coming months. That said, as the incoming administration finds its feet, and friction between democratic expectations and authoritarian structures becomes more visible, we believe the country’s political future will be contentious and, to a degree, even messy. Clients seeking to invest, or have already invested in the country, should exercise caution.
It is entirely clear that the challenges confronted by the NLD government led by Aung San Suu Kyi and headed by her hand-picked president Htin Kyaw are daunting. After half a century of military misrule, there remains a long list of socio-economic woes to overcome: widespread poverty, crumbling infrastructure, a critical energy deficit, rampant corruption, a sclerotic bureaucracy, simmering communal tensions and chronic ethnic conflict. And the administration now moving to address these woes will be constrained by its own patent inexperience, an uncertain relationship with the military (or Tatmadaw), and the distrust it faces from the country’s Buddhist-nationalist hard-liners.
Three priority issues for the NLD
Over the coming months, three priority issues will command the attention of the NLD’s leadership. The first will be stimulating the economy and ensuring that continued growth brings tangible benefits to Myanmar’s farmers and the urban poor. This will need to take place against unfavourable global headwinds and in an economy where much of the low-hanging fruit of liberalization has already been gathered by the former United Solidarity and Development Party (USDP) government. Chinese and Japanese investment in major infrastructure development is likely to play a critical role in this regard and the coming months are likely to see important decisions on new projects.
The second priority – which was defined well before the transfer of power – is the immensely complex peace process between the government and an array of ethnic armed groups operating around the nation’s peripheries. In her role as State Counsellor, Suu Kyi has already moved to set up a new secretariat to coordinate efforts – the National Reconciliation and Peace Centre (NRPC) – while she has also appointed her confidante and former physician, Tin Myo Win, to oversee revived negotiations.
The third priority – on which the first two and much else will depend – will be building and maintaining a good working relationship with the military. The Tatmadaw continues to run the three ‘power ministries’ of defence, border affairs and home affairs; holds veto over constitutional change through a 25 percent bloc of reserved seats in parliament; and exercises a controlling majoriity in the apex National Defence and Security Council (in which Suu Kyi, as foreign minister, and her president Htin Kyaw also sit.)
The emerging centralization of decision-making around Aung San Suu Kyi
Against this backdrop, it is important to note the emerging centralisation of decision-making around Suu Kyi and her inner NLD circle. Much of this trend stems from ‘the Lady’s’ own imperious personality and an undoubted sense of ownership of the party. Critics decry a proclivity to direct rather than to listen and a reluctance to delegate. These personal traits have only exacerbated the lack of management systems at the top of the NLD hierarchy and the poverty of competent second-tier party leadership. New ministerial appointments have been made on the basis of loyalty to the party leader rather than technical competence.
Concentration of power around an NLD ‘inner court’ has been reflected in a lack of transparency and consultation. This has already irritated many in Myanmar’s feisty media and civil society who are today finding it more difficult to access policy-makers than under the former military-backed USDP government. NLD members of parliament have been issued with a simple ‘gag order’ forbidding them to talk to the media. Ministers are required to clear statements with top leadership.
There has also been an understandable distrust within the NLD of a bloated and potentially unresponsive bureaucracy. Whether the early decision to slash the number of ministries from 36 to 22 was overly hasty remains to be seen; but in the short term it has undoubtedly been disruptive and has produced a degree of paralysis. The administration has responded by setting up what are effectively super-committees intended essentially to circumvent the bureaucracy.
As the NLD administration gains confidence in the coming months and cabinet shuffles follow, the salience of many of these issues may decline. But it is a matter of concern that the style of governance in the administration’s first days appears to be playing into a long tradition of top-down governance in Myanmar that raises questions over the nature of Myanmar’s future democracy. It is also difficult to be optimistic over the potential of the decimated USDP to assert itself as a responsible opposition bloc that will be needed to underpin a viable parliamentary democracy in the long term.
Government-military relations
More central to stability over the coming months, however, will be relations between the administration and the military which got off to a strikingly bad start. Despite meetings with Tatmadaw commander-in-chief Senior General Min Aung Hlaing in the wake of her electoral triumph, Suu Kyi’s hopes that the military might relent on the constitutional prohibition on her becoming president were dashed.
Catching the military off guard, she swiftly responded by using the NLD’s parliamentary majority to ram through the creation of a new position of state counsellor for herself. Bolstered by a ministerial-level office, this post makes her effectively the administration’s chief executive officer alongside President Htin Kyaw.
The vote in parliament prompted a walk-out by the military bloc amid accusations that the creation of the post violated the constitution. Our sources in Naypyidaw note that in a pointed snub to the administration, the Tatmadaw has ceased providing weekly security briefings to the cabinet as was the custom under the former USDP government.
Military fundamentally invested in the country’s political transition
Despite these strains, however, we are broadly confident that neither side has any interest in allowing relations to deteriorate and become a serious impediment to civil-military cooperation. This is especially true of the military which is fundamentally invested in the success of the transition to a form of custodial democracy which it has both designed and overseen. Indeed, the once-reviled Tatmadaw sees obvious advantages to its legitimacy by hitching its wagon to a popular, democratically elected government.
It is notable that in an unusual press conference on 13 May, Senior General Min Aung Hlaing stressed the commitment of the Tatmadaw to work with the government. At the same time, he also made clear that the military will continue to call the shots on matters of security: in recent weeks offensive operations involving ground and air attacks on various insurgent factions have continued apace across Kachin, Shan and Rakhine states.
The first and arguably most important test of civil-military cooperation will be the peace process with the ethnic insurgents which will inevitably bring to the fore the issue of federalism and, by extension, reform of the military-scripted 2008 Constitution. In convening what she has described as a “21st Century Panglong Conference,” Suu Kyi has effectively proposed a new national accord along the lines of that reached between her father Aung San and ethnic leaders in February 1947. The federalist constitution and guarantees of ethnic autonomy which emerged from the first Panglong conference were torn up in the military coup of 1962 setting the stage for decades of civil war.
Peace prospects remain bleak
The prospects for the peace process in the coming months are almost certainly bleak. In the short term, however, this has much less to do with tensions between the NLD and Tatmadaw over constitutional reform than with the chaotic disagreements among the plethora of ethnic armed organisations (EAOs) that preclude any consensus as they enter negotiations with the government and the military.
More than 20 EAOs are now divided between eight factions, mostly militarily insignificant, which last October signed a so-called National Ceasefire Accord (NCA) with the former government; and a majority of stronger groups, mostly operating along the Chinese border, which refused to sign.
Negotiations set to resume in July are likely to focus on efforts to cajole the hold-outs – some observing unilateral ceasefires with the military, others continuing to fight – into joining the NCA. However, given Tatmadaw insistence on EAOs laying down their arms and joining an essentially open-ended political dialogue with no guarantees of constitutional change, prospects for a settlement are not good. Indeed, in the short to medium term there is a likelihood of continued and even escalating hostilities in Shan, Kachin and Rakhine states.
In the longer term, we believe that a future role for China on the side-lines of the peace process is likely to prove crucial to any real progress. Beijing’s influence with the powerful ethnic alliance of NCA hold-outs that includes the Wa, Kokang, Palaung, Arakanese and Kachin, provides it with a solid stick in the complex, carrot-and-stick pursuit of its strategic interests in Myanmar. These interests center primarily on developing friendly relations, trade and investment, and, not least, infrastructure vital to China’s One Belt-One Road geo-strategy. They also include checking the ambitions of Western or Japanese interlopers seeking to extend their own influence along China’s south-western flank. With this much at stake in Myanmar, Beijing can ill afford to see the collapse of the peace process and a descent into wider conflict.
